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Sunday, June 13, 2010

Is a college degree still worth it?

Higher education seems to be taking a beating the last couple of weeks or so. From LA Times:
After spending tens of thousands of dollars on higher education, often taking on huge debts along the way, many face a job market that doesn't seem to need them. Not only is the American economy producing few new jobs of any kind, but the ones that are being added are overwhelmingly on the lower end of the skill and pay scale.

In fact, government surveys indicate that the vast majority of job gains this year have gone to workers with only a high school education or less, casting some doubt on one of the nation's most deeply held convictions: that a college education is the ticket to the American Dream.

The Bureau of Labor Statistics projects that seven of the 10 employment sectors that will see the largest gains over the next decade won't require much more than some on-the-job training. These include home healthcare aides, customer service representatives and food preparers and servers. Meanwhile, well-paying white-collar jobs such as computer programming have become vulnerable to outsourcing to foreign countries.

"People with bachelor's degrees will increasingly get not very highly satisfactory jobs," said W. Norton Grubb, a professor at UC Berkeley's School of Education. "In that sense, people are getting more schooling than jobs are available."

He noted that in 1970, 77% of workers with a bachelor's degree were employed in professional and managerial occupations. By 2000, that had fallen to 60%.

Of the nearly 1 million new jobs created since hiring turned up in January, about half have been temporary census jobs. Most of the rest are concentrated in such industries as retail, hospitality and temporary staffing, according to the Bureau of Labor Statistics.
...
Economists say it's understandable that the early stages of the recovery are benefiting less-educated workers. They were the hardest hit during the downturn; they're also cheaper and often easier for employers to bring on board than better-educated workers.

No one is arguing that higher education isn't beneficial. Even now, the unemployment rate for college graduates stands at 4.7% — less than half of the figure for workers with only a high school diploma.

Also, federal statistics for 2008 show that men 25 and older with a bachelor's degree pulled down a median salary of $65,800. That compares with a median of $39,010 for men in the same age group who had completed only high school. Earnings for women were broadly smaller, although the pay gap by education was similar in percentage terms to that of male workers.

"In my mind, the data is overwhelmingly clear: The B.A. is worthwhile," said Stephen Rose, a labor economist and research professor at Georgetown University.

What's not as clear as it used to be is whether pursuing higher education will continue to guarantee a substantially more affluent and secure life. Higher degrees today don't always bring higher earnings.

And there's good reason to believe that a bachelor's alone may not be enough to command rising premiums over a lesser education or to open doors to the kinds of jobs that college graduates have been accustomed to.

Increasingly, the job market has become polarized, with the fastest-growing occupations on either the low end or the high end, often for positions that require more education than a bachelor's degree.

Middle-skilled occupations such as sales, office and administration — positions perhaps most readily open to community college graduates — have shown little or no growth over the last decade, and they fell sharply during the recession, according to research by David Autor, an economics professor at MIT.

Meanwhile, record numbers of people are enrolling in colleges. Those in two-year colleges made up 43% of the 16.4 million enrolled in degree-granting institutions in the fall of 2008, the latest year for which numbers are available. Even so, Autor's research shows that inflation-adjusted wages of workers with less than a four-year college degree fell steeply between 1979 and 2007, particularly for men.
Via Newsalert who also cited a column by Glenn Reynolds who argued that the higher education bubble is about to burst:

It's a story of an industry that may sound familiar.

The buyers think what they're buying will appreciate in value, making them rich in the future. The product grows more and more elaborate, and more and more expensive, but the expense is offset by cheap credit provided by sellers eager to encourage buyers to buy.
Well I would look forward to re-evaluating the cost of a post-secondary education. Especially on the undergrad level. In addition to that we may well need to re-evalution what one is expected to recieve from a Bachelor's degree.

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